Amber Company recognized accrued salary expense. Which of the following financial statements are affected by this accounting event?
A) Statement of cash flows
B) Income statement
C) Balance sheet
D) Income statement and the balance sheet

Question

Quizplus · Accepted Answer

The recognition of accrued salary expense affects both the income statement and the balance sheet. The income statement will report the expense as a decrease in net income, while the balance sheet will report the expense as a liability, decreasing the company's equity. The statement of cash flows is not affected as no cash transaction has occurred.

Amber Company Recognized Accrued Salary Expense